Multiple reports issued in the last month have called into question the pace of the planned transition from fossil fuel to zero emission clean energy.
As reported in past columns, New York’s Climate Leadership and Community Protection Act (CLCPA) calls for greenhouse gas reduction from 1990 levels of 40% by 2030 and 85% by 2050. Consequently, New York is seeking renewable energy generation targets of 70% by 2030 and 100% emissions free by 2040. These targets are highly ambitious and have a host of siting, approval, implementation, and reliability concerns.
A final scoping plan developed by the CLCPA Climate Action Council was approved by the Council on December 19, 2022, by a 19-3 vote. The plan is aimed at addressing the statutory targets by fundamentally transforming several aspects of New York life. While reporting has touched on elements of the proposed plan coming out of proposals and public meetings in the last year, it’s hard to overstate the significance of the changes that the state will experience if they come to fruition. The plan will affect almost every facet of life, ranging from transportation, homes, commercial buildings, energy to local project approvals.
The New York Independent System Operators (ISO) recently issued its Power Trend report that raises significant questions about the pace of the transition and impact on the state’s power grid. ISO noted that New York is retiring nearly twice as much electricity generation as it is adding to the system and the CLCPA goals have a timeline that put the grid at serious reliability risk. In particular, since 2019 New York has deactivated over 5,200 megawatts of power while adding 2,256 megawatts of power to the grid. ISO also noted that while the New York grid is presently a summer peaking system (based on air conditioning demand), by the 2030s it will become a winter peaking system as demand grows about 1,000 megawatts per year to accommodate electrification. ISO also identified weather threats such as the 2022 winter storm that mandate the need for reliable power and heat in adverse weather conditions.
Recently announced microchip projects, such as WNY Stamp (estimated 300 megawatts) and Micron NY Semiconductor (estimated 480 megawatts), along with several smaller projects, will add significant electrical demand to the state grid. While microchip manufacturing requires reliable energy sources, renewable energy is subject to sudden weather changes and presents grid operators with new challenges to balance supply and demand. Significantly, ISO’s report noted that these “variables highlight the need for new generation technologies that can fill in when weather-dependent resources are unavailable. Such new technologies, collectively referred to as Dispatchable Emission Free Resources (DEPRs), must be dispatchable, emissions free, and able to respond quickly to changing grid conditions. Such technologies do not yet exist on a commercial basis.”
The NYS Comptroller’s Office recently completed an audit of the CLCPA transition. While initially stating that NYS is moving in a positive direction, the Comptroller’s audit found “inadequate planning, monitoring and assessment of risks and challenges in the PSC’s efforts to help the state meeting the Climate Leadership and Community Protection Act’s (Climate Act) targets, which seek 70% renewably sourced electricity by 2030 and net zero emissions by 2040.” Notably, PSC used outdated data and wrong calculations to determine if the state could even reach 70% renewably sourced electricity by 2030.
Significantly, the Comptroller’s audit found that PSC did not adequately account for potential risks and challenges that could delay the state’s path to the CLPA targets. The audit recognized the ISO concerns that the state would need new technology that is not yet developed to address weather related intermittent application of renewable energy and significant expanded transmission capacity to distribute energy to customers.
The pace of new clean energy projects was also identified as an area of concern. Through 2023, the state found 230 large-scale renewable projects were awarded contracts within the CLCPA program and 28 projects were cancelled between 2005 to 2023. Of the remaining 202 projects still subject to award, only 30% of that number were completed. The Comptroller noted that most large-scale projects take up to five years to complete.
We have previously identified concerns in this column about the cost of expedited transition to mandated clean energy. The Comptroller’s audit identifies this as a clear deficiency in the state program. The audit summary is striking and consists of the following conclusion:
“[t]he PSC did not reasonably estimate or verify other entities’ estimates of the cost of transition to renewable energy. Undertaking a project without knowing the costs increases the risk that the project will not succeed. The absence of cost estimates also makes it difficult, if not impossible, to assess its impact on New Yorkers, including those who are currently struggling to pay their utility bills and who have faced rising costs over the past two years. PSC officials stated that they expect the cost of renewable energy to decrease as time goes on, but did not produce an analysis that demonstrated how quickly they expect these costs to decline.”
The Comptroller’s audit recommended a number of steps to PSC, including a comprehensive review of CLCPA and progress toward goals (as well as annual funding); analyzing risks and issues with the program; developing a more accurate assessment of likelihood of meeting targets based on the timing of projects not yet in operation; and performing an analysis of cost estimates for the public to assess impacts to the public.
Key concerns with the CLCPA mandate to transition to renewable energy included lack of accounting for the costs, generation capacity limits and reliability issues to the grid. Both the ISO and Comptroller’s audit underscore these concerns and the lack of appreciation by state agencies, such as PSC, of the significance of these concerns. Hopefully, New York State citizens are not put at risk and hurt financially because of the expedited energy transition plan.
George S. Van Nest is Partner in Underberg & Kessler LLP’s Litigation Practice Group and chair of the firm’s Environmental and Municipal Law Practice Groups. He focuses his practice in the areas of environmental law, municipal law, development, construction and commercial litigation.
Reprinted with permission from The Daily Record and available as a PDF file here.